On Dec. 13, we reported that Riot Platforms has purchased $510 million worth of Bitcoin (BTC), bringing their total holdings to almost $1.7 billion, according to a regulatory filing. Starboard has a significant position in the company, a pressure point that the Bitcoin miner is under as it buys more hardware.
Riot has been told by Starboard that it should diversify its operations, and repurpose Bitcoin mining facilities to serve artificial intelligence models, which is exactly where the AI demand is growing. The reports said Riot responded and said they were ‘committed to value creation for all shareholders and look forward to constructive dialogue with Starboard.’
Riot Platforms’ Potential Valuation Boost Through AI Pivot
As people are growing more and more interested in mining Bitcoin, energy infrastructure and lots of data centers, people start to see Bitcoin miners as being a part of the AI industry. VanEck’s digital assets research says that a pivot to AI could see the Bitcoin mining industry accrue up to $37 billion in market capitalization.
Riot would raise its valuation by more than $4.8 billion to nearly $10 billion, assuming that’s its current market cap of $4.4 billion.
Investors have also welcomed Riot’s focused on building up substantial BTC reserves, to the point that even despite Starboard’s persuasive offer to raise AI-related businesses, Riot’s shareholders have sided with it too.
“We are expanding upon this framework by incorporating 1) the value of each company’s land and power assets […] and 2) a HODL premium, which gives miners credit for holding Bitcoin on their balance like MicroStrategy.”
In a recent round of raising of price targets for Bitcoin mining firms, analysts at JPMorgan took into account the growing value of miners’ Bitcoin holdings. The strategy echoes that of MicroStrategy who has spent $25 billion buying Bitcoin during the run of Michael Saylor as co founder.
And the move has worked as BTC has soared past $100,000 per coin, sending MicroStrategy’s share price off 2,500%. Riot’s strategic decisions as Bitcoin miners now look for diversified revenue streams will be watched by shareholders at the intersection of blockchain and AI.
